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Six days on the road and I'm gonna park my truck to comply with state laws tonight

My apologies to Dave Dudley. The song “Six Days on the Road” just doesn’t stand up to the changes we would have to make after the Ninth Circuit’s decision that the state meal and rest break laws are not preempted by federal hours of service laws (though I’m pretty sure that, eyes open wide or not, the “taking little white pills” part wasn’t even legal in 1963). Last week, in a case we have been watching carefully since this spring, Dilts v. Penske Logistics, the Ninth Circuit issued a decision affecting two related cases from the trucking industry that questioned whether California’s detailed meal and rest break requirements conflicted with a federal statute barring states from regulating the prices, routes and services of motor carriers and airlines. The case might seem to be a boring, narrow constitutional law issue, but the Ninth Circuit’s ruling that federal law does not trump California’s meal and break laws could have a substantial impact on transportation industry employers, whether in California, in the western states covered by the Ninth Circuit where this ruling applies immediately, or elsewhere in the country.

The Meal and Break Law Preemption Battle’s History

In 2008, motor carriers petitioned the Federal Motor Carrier Safety Administration (FMCSA) seeking a finding that state meal and break laws (like the ones in California) are preempted by the federal hours of service laws pursuant to the Federal Aviation Administration Authorization Act of 1994 (FAAAA) when applied to motor carriers. The FMCSA denied that petition, reasoning that the break law was just one part of California’s employment regulations that applied generally to employers in a variety of other industries. The FMCSA reasoned that Congress only preempted state laws and regulations related to commercial motor vehicle safety, not all laws generally that in any way overlap with the FMCSA's hours of service regulations.

In 2012, two district courts considered claims under California law by classes of delivery drivers (one making residential appliance deliveries, the other involving “city/local” drivers transporting a variety of cargo). The plaintiffs claimed that their fixed routes and the timing of deliveries prevented them from taking the meal breaks prescribed by state law. Unlike the FMCSA, the district courts found that the claims were preempted under the FAAAA’s expansive language, and determined that requiring motor carriers to follow California requirements for meal and rest periods would interfere with competitive market forces within the industry because they are directly related to the frequency and scheduling of transportation.

The Ninth Circuit invited the Department of Transportation (DOT) to participate as an amicus in the case this spring. First, the DOT argued against preemption because laws like the one in California were not specifically targeted toward the motor carrier industry. Second, the DOT argued that its position on the preemptive reach of the FAAAA should be given deference by the courts based largely on its expertise in regulation and interpretation of motor carrier safety under the Federal Motor Carrier Safety Act (the “Act”), even though the Act and the FAAAA are entirely separate and the DOT doesn’t regulate the latter.

The Ninth Circuit’s Decision

The Ninth Circuit ultimately agreed with the DOT’s interpretation. While the court recognized that the FAAAA uses expansive language, it found only a tenuous link between California’s meal and break laws and motor carriers’ prices, routes, or services. It held that where a state law does not refer directly to rates, routes, or services, “the proper inquiry is whether the provision, directly or indirectly, binds the carrier to a particular price, route or service and thereby interferes with the competitive market forces within the industry.”

Under that analysis, the court held that California meal and break laws do not directly or indirectly set prices, mandate or prohibit certain routes, or force motor carriers to provide or not provide certain services. The court found that merely accounting for meal and rest break requirements when scheduling routes, even if that meant potentially reallocating resources, did not bind motor carriers to specific prices, routes, or services in any significant way.

However, while the court declined to preempt these state laws in every case, it did leave room for individual employers to demonstrate preemption on an “as applied” basis. In these two cases, the court was not convinced that the carriers had made sufficient showings of the difficulties in scheduling breaks, the impact on their staffing levels, and the resulting influence on rates and routes to justify exempting them from compliance with California’s meal and break laws. One of the judges on the panel concurred specifically to emphasize that the defendant, Penske Logistics, failed to carry its burden of proof on its preemption defense.

Insights for Motor Carriers and Employers

The Ninth Circuit’s decision seems to overlook the complex logistical and scheduling issues involved in staffing around meal and break laws, particularly where pricing and performance are based on delivery speeds and timing. Of course, carriers often cannot control traffic delays, delivery backups and other related issues. The underlying arguments in the district court cases are pretty compelling that the meal and rest break laws are “related to” a motor carrier’s prices, routes, or services and are therefore preempted by the FAAAA. Arguably, with a better-developed factual record about the impact on carriers, other courts could come to the opposite conclusion than the Ninth Circuit.

However, until another appellate court weighs in, motor carriers should assume that they will have to comply with state meal and break laws. Motor carriers and other businesses employing drivers in California, Illinois, or other states that have enacted general meal and break laws should start looking now at whether they comply with these laws, rather than assuming that they are preempted by federal hours of service regulations.

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